Capacity validation, renominations and within-day capacity purchase EU Workgroup 7 August 2014

Capacity and Nominations Intend to maintain current rules, no proposed changes Hourly vs daily regimes IUK Shippers have bought hourly capacities and can nominate either daily or hourly IUK confirmed quantities and allocations are calculated hourly NGG Shippers nominate a daily quantity Capacity validation IUK Shipper nominations are validated against capacity entitlement IUK Shipper nominations for any hour must not exceed their capacity rights for that hour NGG does not validate against capacity, except during exceptional events Today – slides to illustrate how the two regimes work in parallel

Example 1 Day-Ahead Shipper nominates 120 units against their daily NGG capacity of 240 units and nominates 5 units per hour against their hourly IUK capacity of 10 units per hour IUK carries out capacity validation on nominations to ensure the IUK Shipper has sufficient hourly capacity, and constrains IUK Shipper nominations to their capacity entitlement Time NGG Capacity NGG Nom IUK Capacity IUK Nom 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 240 units 10 5 Time NGG Capacity NGG Nom IUK Capacity IUK Nom 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 240 units Daily 120 10 5

Example 1 continued… Within-Day Shipper renominates upwards to use all its capacity entitlement from 17:00 NTS Shipper can nominate 240 units; IUK Shipper can only nominate maximum hourly capacity, i.e. 10 units per hour for the remainder of the day Renominating to maximum level means total allocation by end of day of: 180 units , so should nominate 180 units of NGG capacity Time NGG Capacity NGG Nom IUK Capacity IUK Nom 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 240 units 10 5 Time NGG Capacity NGG Nom IUK Capacity IUK Nom 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 240 units Daily 120 180 10 5 10

Example 2 Day-Ahead NTS Shipper nominates 120 units against their daily NGG capacity of 240 units and profiles their Interconnector nominations, using a total of 120 units IUK capacity IUK carries out a capacity validation on each hourly nomination to ensure IUK Shipper has sufficient capacity Time NGG Capacity NGG Nom IUK Capacity IUK Nom 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 240 units 10 5 Time NGG Capacity NGG Nom IUK Capacity IUK Nom 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 240 units Daily 120 10 7.5

Example 2 continued… Within-Day IUK Shipper renominates upwards to use all its capacity entitlement from 19:00 Already allocated 35 units – cannot change this Can renominate up to 10 units/hour for remaining 10 hours of the day Renominating to maxiumum level means total allocation by end of day of 135 units, so should nominate 135 units of NGG capacity Time NGG Capacity NGG Nom IUK Capacity IUK Nom 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 240 units 10 5 Time NGG Capacity NGG Nom IUK Capacity IUK Nom 17:00 18:00 ………………… 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 240 units Daily 120 135 10 7.5 7.5 10

Example 3 – Purchasing NGG capacity within day Shipper has 120 units of NGG daily capacity and 10 units/hour IUK capacity Shipper wants more NGG capacity from 17:00 within day Already allocated 20 units, and has 10 units per hour of IUK capacity available for the remainder of the day, therefore: cannot flow more than 140 units, so should only buy max 20 NGG units Time NGG Capacity NGG Nom IUK Capacity IUK Nom 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 120 units 10 5 Time NGG Capacity NGG Nom IUK Capacity IUK Nom 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 120 units across the day 10 5 Time NGG Capacity NGG Nom IUK Capacity IUK Nom 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 120 + 20 effective 17:00 units Daily 140 10 7.5 10

Process of buying Within-Day Capacity